Stock Market Outlook for September 29, 2023
The equity market has reached the end of the weakest period of the year.
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Identive Group (NASD:INVE) Seasonal Chart
TIM S.A (NYSE:TIMB) Seasonal Chart
iShares U.S. Basic Materials ETF (NYSE:IYM) Seasonal Chart
iShares MSCI Brazil Capped ETF (NYSE:EWZ) Seasonal Chart
Companhia Vale do Rio Doce SA (NYSE:VALE) Seasonal Chart
Noah Holdings Ltd. (NYSE:NOAH) Seasonal Chart
Commercial Metals Co. (NYSE:CMC) Seasonal Chart
Jaguar Mining Inc. (TSE:JAG.TO) Seasonal Chart
The Markets
Stocks continued to solidify their stand that they amounted on Wednesday as investors monitor evidence of a near-term peak in rates and the US Dollar heading into the close of the quarter. The S&P 500 Index closed with a gain of six-tenths of one percent, continuing to show support just above the important horizontal barrier at 4200 and the 200-day moving average. The benchmark did not achieve the follow-through above the 4313 level that we proposed in our last report as the hurdle to confirm the shift of the short-term trend following its recent slide attributed to the weakest time of year for stocks, but the market is providing fairly compelling evidence that a short-term low has been achieved. The Relative Strength Index (RSI) has started to curl higher from near oversold levels achieved in recent days and the MACD histogram has started to narrow, signalling waning near-term downside selling pressures. Both RSI and MACD are firmly embedded below their middle lines, which is characteristic of a bearish trend, raising questions as to the sustainability of the strength that may materialize from this short-term low. The 20 and 50-day moving averages continue to curl lower and can be seen at 4420 and 4457, respectively, providing potential points of resistance that could keep the short-to-intermediate path capped. Greater clarity on the intermediate-to-long-term direction of the US Dollar and interest rates is needed. Today, the last trading day of September and the third quarter of the year, marks the end to the weakest time of year for stocks, something that we have stood back from in our equity exposure. As we look to the start of the best six months of the year for stocks, so long as the 4200 hurdle remains as support, looking to become exposed to risk (stocks) again has now become appropriate. Volatility can remain seasonally elevated through the first week and a half of October, on average, but this is the timeframe that stocks tend to bottom following their third quarter reset.
Today, in our Market Outlook to subscribers, we discuss the following:
- Pre-Election Year Tendencies for stocks
- The change we are making in the Super Simple Seasonal Portfolio
- Weekly Jobless Claims an the health of the labor market
- US Durable Goods Orders
- Investor sentiment
Subscribers can look for this report in their inbox or by clicking on the following link and logging in: Market Outlook for September 29
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Soon to be released…
We are busy putting the finishing touches on our monthly report for October, providing you with insight on what to look out for in the month(s) ahead. This report is slated to be released on Friday. Subscribers can look for this report in their inbox shortly.
Sentiment on Thursday, as gauged by the put-call ratio, ended neutral at 0.99.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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